Prosus NV on Wednesday said it is valuing Byju’s at under $3 billion, 86 per cent less than its peak valuation of $22 billion last year, as the company has struggled with governance and cash flow problems, according to a report by Reuters.
The disclosure, made by interim chief executive officer (CEO) Ervin Tu during Prosus earnings call, is Byju’s latest and most significant valuation cut.
This is the second time Prosus has cut the valuation of Byju’s. In November last year, Prosus first slashed the fair value of Byju’s to $5.97 billion.
In July, a director of the firm stepped down from Byju’s board. Prosus had alleged that Byju’s directors “regularly disregarded advice” despite repeated efforts by the Dutch-listed technology firm’s former director.
It said the decision for its director to step down from Byju’s board was mainly because he was “unable to fulfil his fiduciary duty to serve the long-term interests of the Company and its stakeholders.”
Byju’s, once India’s most valuable startup, counts investors such as General Atlantic and BlackRock among its backers but has seen its auditor, Deloitte, and multiple investor board members resign in recent months.
The federal probe agency mentioned multiple grounds for charging the company and its chief promoter, including charges of “failing” to submit documents of imports against advance remittances made outside India, failing to realise proceeds of exports made outside India by the delayed filing of documents against the Foreign Direct Investment (FDI) received into the company, among others.
It said in a statement that a show cause notice has been issued to the registered company of BYJU’s–Think & Learn Private Limited– and Raveendran with respect to the contraventions of the provisions of the Foreign Exchange Management Act (FEMA) to the tune of Rs 9,362.35 crore.
Post final adjudication, the ED has powers to penalise FEMA violators up to three times the value of the amount mentioned in the show cause notice.